QUARTERLY REPORT FOR SMALL BUSINESS ISSUERS
                 SUBJECT TO THE 1934 ACT REPORTING REQUIREMENTS

                                   FORM 10-QSB

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

[x]  QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
     1934

                For the quarterly period ended September 30, 2000

                                       OR

[    ] TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
     OF 1934

                       Commission File Number: 001-14005

                            FRISBY TECHNOLOGIES, INC.
             (Exact Name of Registrant as Specified in its Charter)

                  Delaware                           62-1411534
        (State or other Jurisdiction of          (I.R.S. Employer
       Incorporation or Organization)          Identification Number)

                             3195 Centre Park Blvd.
                             Winston-Salem, NC 27107
              (Address of Principal Executive Offices and Zip Code)
                                  336-784-7754
              (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                    Yes       X               No  ________

Number of shares  outstanding of the issuer's Common Stock,  par value $.001 per
share, as of September 30, 2000, 6,577,588 shares.



<PAGE>


                            FRISBY TECHNOLOGIES, INC.


                                      INDEX
<TABLE>
<CAPTION>

                                                                                         PAGE NO.

Part I            Financial Information


Item 1.           Financial Statements


                  Balance Sheets - September 30, 2000 (unaudited) and
<S>                                                                                           <C>
                  December 31, 1999                                                           3

                  Statements  of Operations - Three Month and Nine Month Periods
                  Ended  September 30, 2000  (unaudited)  and September 30, 1999
                  (unaudited)                                                                 4

                  Statement of Stockholders' Equity - Nine Month Period
                  Ended September 30, 2000 (unaudited)                                        5

                  Statements  of Cash Flows - Nine Month Period Ended  September
                  30, 2000 (unaudited) and September 30, 1999 (unaudited)                     6

                  Notes to Financial Statements - September 30, 2000 (unaudited)              7

Item 2.           Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                                   8

Part II           Other Information                                                          12

                  Signatures                                                                 14
</TABLE>

<PAGE>


                                  PART I - FINANCIAL INFORMATION
                                   ITEM 1. FINANCIAL STATEMENTS

                                    FRISBY TECHNOLOGIES, INC.
                                          BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                         SEPTEMBER 30,   DECEMBER 31,
                                                                             2000            1999
                                                                         (unaudited)
ASSETS
Current assets:
<S>                                                                     <C>             <C>
     Cash and cash equivalents                                          $    707,173    $  1,171,579
     Accounts receivable, less allowance for doubtful accounts             1,161,684       1,849,436
     Inventory                                                             2,941,889       1,097,049
     Prepaid and other current assets                                        348,892         559,820
                                                                             -------         -------
Total current assets                                                       5,159,638       4,677,884
Property and equipment, net                                                  811,287         604,921
Investment in joint venture                                                  152,768             --
Intangible assets, less accumulated amortization                           1,560,534       2,838,603
Other assets                                                                  76,094         298,439
                                                                              ------         -------
Total assets                                                            $  7,760,321    $  8,419,847
                                                                        ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                   $    684,249    $  1,622,280
     Note payable - short term                                             1,571,469         549,981
     Accrued expenses and other current liabilities                          376,287         239,999
     License fees payable                                                    190,955         282,565
     Deferred license revenues                                                30,002          26,254
                                                                              ------          ------
Total current liabilities                                                  2,852,962       2,721,079
Accrued license agreement costs                                               98,500         120,250
Other liability                                                                 --         1,300,000
                                                                              ------       ---------
Total liabilities                                                          2,951,462       4,141,329
Minority interest                                                            139,228            --

Commitments and contingencies
Stockholders' equity:
     Common Stock, $.001 par value; 30,000,000 shares authorized at
     September 30, 2000; 10,000,000 shares authorized at December
     31, 1999; 6,577,588 and 5,748,113 shares issued and outstanding,
     respectively                                                              6,577           5,748
     Additional paid-in capital                                           18,707,654      14,888,201
     Accumulated deficit                                                (14,044,600)    (10,615,431)
                                                                        -----------     ------------
Total stockholders' equity                                                 4,669,631       4,278,518
                                                                           ---------       ---------
Total liabilities and stockholders' equity                              $  7,760,321    $  8,419,847
                                                                        ============    ============

<FN>
See accompanying notes.
</FN>
</TABLE>
<PAGE>

                            FRISBY TECHNOLOGIES, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                  Three month period ended      Nine month period ended
                                                       September 30,                 September 30,
                                                     2000          1999           2000           1999
                                                     ----          ----           ----           ----
Revenues:
<S>                                             <C>            <C>            <C>            <C>
    Product sales                               $ 1,682,611    $ 1,341,497    $ 6,807,799    $ 3,840,443
    Research and development projects                  --           52,725         63,967        198,975
    Licenses and royalties                           27,124         45,249        164,219        302,529
                                                     ------         ------        -------        -------
Total revenues                                    1,709,735      1,439,471      7,035,985      4,341,947

Cost of sales:
    Product sales                                 1,089,838      1,126,655      4,868,886      3,055,896
    Research and development projects                  --           30,300         18,000        199,142
    Licenses and  royalties                          (3,444)        58,800        435,156        296,057
                                                     ------         ------        -------        -------
Total cost of sales                               1,086,394      1,215,755      5,322,042      3,551,095
                                                  ---------      ---------      ---------      ---------
Gross profit                                        623,341        223,716      1,713,943        790,852


Selling and marketing expense                       555,520        506,877      1,826,164      2,003,060
General and administrative expense                1,030,224      1,158,922      3,253,179      3,051,063
                                                  ---------      ---------      ---------      ---------
Loss from operations                               (962,403)    (1,442,083)    (3,365,400)    (4,263,271)
Interest expense/ (income)                           15,593        (33,894)        74,872       (166,459)
Minority Interest                                       798           --          (11,103)          --
Provision for income taxes                             --             --             --             --
Net loss                                        $  (978,794)   $(1,408,189)   $(3,429,169)   $(4,096,812)
                                                ===========    ===========    ===========    ===========

Net loss per common share - basic and diluted   $     (0.15)   $     (0.25)   $     (0.56)   $     (0.74)
                                                ===========    ===========    ===========    ===========
<FN>
See accompanying notes.
</FN>
</TABLE>


<PAGE>


                            FRISBY TECHNOLOGIES, INC.
                        STATEMENT OF STOCKHOLDERS' EQUITY
                   NINE MONTH PERIOD ENDED SEPTEMBER 30, 2000
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                 Additional
                                          Common Stock             Paid-In     Accumulated
                                      Shares         Amount        Capital       Deficit           Total
                                      ------         ------        -------       -------           -----
Balance at
<S>                                 <C>             <C>          <C>          <C>             <C>
  December 31, 1999                 5,748,113       $  5,748   $ 14,888,201   $(10,615,431)   $  4,278,518

Net loss                                 --              --             --      (3,429,169)     (3,429,169)

Exercise of employee
  stock options                        29,475             29        123,034           --           123,063

Sale of common stock and
  warrants, net of $302,781 of
  related costs and expenses          800,000            800      3,696,419           --         3,697,219
                                      -------            ---      ---------   ------------       ---------
Balance at
  September 30, 2000                6,577,588       $  6,577   $ 18,707,654   $(14,044,600)   $  4,669,631
                                    =========       ========   ============   ============    ============


<FN>
See accompanying notes.
</FN>
</TABLE>




<PAGE>
                                    FRISBY TECHNOLOGIES, INC.
                                     STATEMENTS OF CASH FLOWS
                                           (UNAUDITED)

<TABLE>
<CAPTION>

                                                                            Nine month period ended
                                                                                September 30,
                                                                              2000           1999
                                                                              ----           ----

OPERATING ACTIVITIES
<S>                                                                       <C>            <C>
Net loss                                                                  $(3,429,169)   $(4,096,812)
Adjustments to reconcile net loss to net cash used in operating
     activites:
     Depreciation and amortization                                            169,630        129,635
     Non cash consulting expense                                                 --           70,000
     Amortization of intangibles                                              186,974        153,900
     Changes in assets and liabilities, prior to effect of acquisition:
          Accounts receivable                                                 687,752       (643,614)
          Inventory                                                        (1,844,840)        15,794
          Other current assets                                                210,928        378,496
          Other non-current assets                                            222,345         99,522
          Accounts payable                                                   (938,031)       (77,343)
          Accrued expenses and other current liabilities                      136,288       (241,891)
          Licenses fees payable                                              (113,360)         4,748
          Other liabilities                                                   142,976        (38,747)
                                                                              -------        -------
Net cash used in operating activities                                      (4,568,507)    (4,246,312)
                                                                           ----------     ----------

INVESTING ACTIVITIES
Purchases of property and equipment                                          (375,996)      (381,147)
Proceeds from sale of short-term investments                                     --         1,534,684
Purchase of intangible assets                                                (208,905)      (400,000)
Investment in joint venture                                                  (152,768)          --
Purchase of business, net of cash acquired                                       --         (100,830)
                                                                             --------       --------
Net cash (used in)/provided by investing activities                          (737,669)       652,707
                                                                             --------        -------

FINANCING ACTIVITIES
Repayment of line of credit                                                  (549,981)          --
Proceeds from exercise of stock options                                       123,063           --
Net proceeds from private placement, net                                    3,697,219           --
Net proceeds from advances on line of credit                                1,571,469           --
                                                                            ---------          ----
Net cash provided by financing activities                                   4,841,770           --
                                                                            ---------          ----

Net increase(decrease) in cash and cash equivalents                          (464,406)    (3,593,605)
Cash and cash equivalents - beginning of period                             1,171,579      6,516,138
                                                                            ---------      ---------
Cash and cash equivalents - end of period                                 $   707,173    $ 2,922,533
                                                                          ===========    ===========

Supplemental Information:
Interest Paid                                                             $    74,872    $      --

<FN>
See accompanying notes
</FN>
</TABLE>


<PAGE>


                            FRISBY TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                         SEPTEMBER 30, 2000 (UNAUDITED)

1.   Basis of Presentation

     The  accompanying  unaudited  financial  statements  have been  prepared in
conformity  with  generally  accepted  accounting  principles  and  reflect  all
adjustments  consisting of normal recurring adjustments which, in the opinion of
management, are necessary for a fair presentation of the results for the periods
shown. The results of operations for such periods are not necessarily indicative
of the results  expected for the full fiscal year or for any future period.  The
preparation  of financial  statements  in  conformity  with  generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates and assumptions.

     The accompanying  financial  statements  should be read in conjunction with
the audited financial  statements of Frisby  Technologies,  Inc. (the "Company")
for the year ended  December  31, 1999 and the notes  thereto  contained  in the
Company's  Annual Report on Form 10-KSB,  filed with the Securities and Exchange
Commission on April 14, 2000, as amended.

2.   Summary of Significant Accounting Policies

NET LOSS PER SHARE

     Net loss per share for the three and nine month periods ended September 30,
2000  and 1999 are  based  on the  weighted  average  number  of  common  shares
outstanding  during the period in  accordance  with the  Statement  of Financial
Accounting Standard ("SFAS") No. 128 "Earnings Per Share."

     Shares used in the computation of net loss per share for the three and nine
month   periods  ended   September   30,  2000  were   6,575,860  and  6,127,123
respectively. Shares used in the computation of net loss per share for the three
and nine month  periods ended  September  30, 1999 were  5,708,113 and 5,512,345
respectively. The number of shares used in the calculation of net loss per share
on a basic and diluted basis is the same.  The  calculation  of diluted net loss
per share  excludes  shares of common stock  issuable upon the exercise of stock
options and warrants, as the effect of such exercises would be antidilutive.

RECLASSIFICATIONS

     Certain amounts in prior periods have been reclassified to conform with the
current period presentation.

3.   Shareholders' Equity

     On  May  31,  2000  the  Company   completed  a  private  placement  equity
transaction  with an  investor  group for $4  million of a  potential  aggregate
equity transaction in the Company of up to $7.5 million.  This transaction was a
unit (the "Unit")  consisting  of one share of Frisby common stock on the Nasdaq
SmallCap  Market and one five-year  warrant to buy a share of common stock at an
exercise price of $7.00 per share. The purchase price of this offering was $5.00
per Unit.

4.   Joint Venture

     During the first quarter of 2000, the Company established  Schoeller Frisby
Technologies,  GmbH,  a joint  venture  with  Schoeller  Textil AG to expand the
European  distribution  of the Company's  products.  The Company owns 51% of the
outstanding  shares of the common stock of the joint  venture and,  accordingly,
consolidates  the joint venture.  The joint venture began  operations in January
2000.

     The Company recorded minority interest expense,  which reflects the portion
of the earnings of Schoeller  Frisby  Technologies  GmbH that are  applicable to
Schoeller  Textil AG's minority  interest.  The minority  interest amount on the
Balance  Sheet  represents  the  share of the net  assets  of  Schoeller  Frisby
Technologies  GmbH  associated  with the  minority  partner's  interest in those
operations.

5.   Other Commitments

     During  the  third  quarter  of  2000,  the  Company  filed a  registration
statement  that  included  warrants  outstanding  issued  in  connection  with a
September  1998  agreement  with the inventor.  As a result of the filing of the
registration  statement,  a put  agreement  associated  with  the  warrants  was
eliminated.  Accordingly, the $1.3 million value of the put agreement previously
recorded in Other Liabilities was eliminated  against the intangible asset, with
a resulting  decrease in Cost of Sales for Licenses of $188,000  for  previously
recognized amortization.


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

RESULTS OF OPERATIONS  FOR THE THREE AND NINE MONTH PERIODS ENDED  SEPTEMBER 30,
2000 COMPARED WITH THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1999

     REVENUES.  The Company  generates  revenue from four primary  sources:  (i)
sales of its Thermasorb(R),  ComforTemp(R)DCC(TM)  insulating and cooling foams,
fabrics, leathers and gels, and Schoeller(R)-ComforTemp(R)  foam/fabric products
for use in its  strategic  partners'  products;  (ii)  sales of  SteeleVest  and
Extreme Comfort end-user  products (iii) license fees and royalties from the use
of Thermasorb(R) and ComforTemp(R)  trademarks by strategic partners in end-user
products,  as well as other fees earned in connection  with its agreements  with
strategic  partners;  and (iv) revenue from research and  development  contracts
related  to the United  States  Government  and from  private  companies.  Total
revenues for the three months ended  September 30, 2000 increased by $270,264 to
$1,709,735 from $1,439,471 for the three months ended September 30, 1999.  Total
revenues  for the nine month  period  ended  September  30,  2000  increased  by
$2,694,038  to  $7,035,985  from  $4,341,947  for the nine  month  period  ended
September 30, 1999.

     The  majority of this third  quarter  increase  was  generated by increased
product sales of $341,114 to  $1,682,611  from  $1,341,497  for the three months
ended  September  30, 1999.  For the nine month period ended  September 30, 2000
product sales  increased by $2,967,356 to  $6,807,799  from  $3,840,443  for the
nine-month  period ended  September  30, 1999.  These  product  sales  increases
reflect the inclusion of Schoeller Frisby Technologies GmbH sales,  primarily in
Europe,  of  approximately  $429,000 and $2,638,000 for the three and nine month
periods,  respectively, as well as increased sales to existing and new customers
in the United States and Asia.

     COST OF SALES.  The  Company's  cost of sales  consists  of: (i) direct and
indirect costs incurred in connection with product sales;  (ii) royalty payments
required to be made in  accordance  with the  technology  licensing  agreements;
(iii) the amortization expense associated with the transaction with the inventor
to lower the  royalty  rates and (iv)  direct and  indirect  costs  incurred  in
connection with revenue from research and development  contracts.  Total cost of
sales for the three months  ended  September  30, 2000  decreased by $129,361 to
$1,086,394  from  $1,215,755 for the three months ended September 30, 1999. This
third  quarter   reduction  in  cost  of  sales  is  attributed  to  lower  foam
manufacturing  costs coupled with a one time benefit of $188,000  resulting from
the  elimination of a put agreement (see Note 5). Total costs for the nine month
period ended  September 30, 2000  increased by  $1,770,947  to  $5,322,042  from
$3,551,095  for the nine month period ended  September  30, 1999.  This increase
corresponds to the increase in product sales mentioned above

     SELLING AND MARKETING EXPENSE. Selling and marketing expenses for the three
months ended  September 30, 2000  increased by $48,643 to $555,520 from $506,877
for the three months ended  September 30, 1999. For the nine-month  period ended
September  30, 2000  selling and  marketing  expenses  decreased  by $176,896 to
$1,826,164 from  $2,003,060 for the nine-month  period ended September 30, 1999.
This decrease results from the implementation of more cost-effective  methods of
advertising and promotion,  including a de-emphasis on print  advertising in the
quarter  in lieu of  point-of-sale  displays  that are  often  co-funded  by the
Company's customers.

     GENERAL AND ADMINISTRATIVE EXPENSE. General and administrative expenses for
the three months ended  September  30, 2000  decreased by $128,698 to $1,030,224
from $1,158,922 for the three months ended September 30, 1999. Additionally, for
the  nine-month  period ended  September  30, 2000 these  expenses  increased by
$202,116 to $3,253,179  compared to $3,051,063 for the  nine-month  period ended
September  30,  1999.  The  decrease in the  current  quarter  reflects  savings
attributed  to the  elimination  of certain  executive and  non-essential  staff
positions  due to a recently  concluded  Company  streamlining  initiated in the
second quarter.  The increase for the nine-month period is due to the payment of
certain termination benefits associated with the aforementioned streamlining.

     MINORITY INTEREST.  Minority interest represents  Schoeller Textil AG's 49%
interest in the net loss of Schoeller Frisby Technologies GmbH.

     INTEREST  EXPENSE/INCOME.  Interest  expense  for the three and nine months
ended  September  30,  2000 arises from the  advances  made  against the line of
credit in the first three  quarters of 2000.  The  interest  income in the prior
year  reflects  the higher  cash and  investment  balances  due to  receipts  of
proceeds from the Initial Public Offering ("IPO") in April 1998.

     NET LOSS. As a result of the  foregoing,  the net loss for the three months
ended September 30, 2000 decreased 30% to $978,794 from $1,408,189 for the three
months ended September 30, 1999.  Additionally,  the net loss for the nine month
period ended  September  30, 2000  decreased by $667,643,  or 16%, to $3,429,169
from $4,096,812 for the nine month period ended September 30, 1999.

LIQUIDITY AND CAPITAL RESOURCES

     From its inception  through  September  30, 2000,  the Company has incurred
cumulative  losses of  approximately  $14,045,000.  The Company has financed its
operations to date through bank  borrowings and the issuance of common stock and
convertible  preferred stock and research and development  contracts relating to
United States Government programs.

     At  September  30,  2000,  the Company had  working  capital of  $2,307,000
including  cash of $707,000  accounts  receivable of  $1,162,000,  other current
assets of $349,000 and inventory of  $2,942,000,  offset by accounts  payable of
$684,000,  note payable  short-term of $1,571,000 and accrued expenses and other
current liabilities of $597,000.

     Cash used by operating  activities  was  $4,569,000  and $4,246,000 for the
nine months  ended  September  30, 2000 and 1999,  respectively.  The  principal
factor contributing to the cash used in operating activities for the nine months
ended  September  30, 2000 and 1999 was the net loss for each of the  respective
periods.  Cash used by  investing  activities  was  $738,000 for the nine months
ended  September  30, 2000.  The principal  investing  activity for 2000 was the
purchase of office and testing equipment for the new headquarters. Cash provided
by  investing  activities  for the nine  months  ended  September  30,  1999 was
$653,000. The principal investing activities for 1999 were the proceeds from the
sale of short-term  investments  totaling  $1,535,000,  partially  offset by the
purchase  of  fixed  assets  and  an  installment  payment  on the  purchase  of
intellectual  property of $400,000.  Cash provided by financing  activities  was
$4,842,000 for the nine months ended September 30, 2000. The principal financing
activities for the nine months ended  September 30, 2000 were the net advance on
the line of credit of $1,571,000 and the private  placement (net) of $3,697,000.
The Company has incurred  cumulative losses since its inception and,  therefore,
has not been subject to federal  income taxes.  Through  September 30, 2000, the
Company has generated net operating loss  carryforwards in excess of $14,000,000
that  may  be  available  to  reduce  future   taxable  income  and  future  tax
liabilities.  These  carryforwards  expire in years through 2019. The Tax Reform
Act of 1986 provides for an annual  limitation on the use of net operating  loss
carryforwards  (following  certain ownership  changes) that could  significantly
limit the Company's ability to utilize these  carryforwards.  As a result of the
IPO, the Company's ability to utilize the aforementioned carryforwards as of the
IPO date will be limited on an annual  basis.  Additionally,  because the United
States tax laws limit the time during which these  carryforwards  may be applied
against  future  taxes,  the Company may not be able to take full  advantage  of
these attributes for federal tax purposes.

     On  May  31,  2000  the  Company   completed  a  private  placement  equity
transaction  with an  investor  group for $4  million of a  potential  aggregate
equity  transaction  in the Company of up to $7.5 million.  The Company is still
seeking an additional equity investment of $3.5 million.

     The  Company  has a  $2,000,000  Line of Credit  with a bank  that  expires
December 31,  2000.  This line is  principally  maintained  for working  capital
purposes.  The Line is a committed  facility,  which is secured by substantially
all of the Company's  assets,  and bears  interest at the bank's prime rate plus
200 basis points.  At September 30, 2000, the entire credit  facility was either
borrowed  against or used as collateral for the existing  Letters of Credit with
suppliers.  The Company is presently in  discussion  with its lender and several
other financial institutions regarding the renewal or replacement of this credit
facility.  Management believes it will be able to maintain its required level of
financing.

     The Company established Schoeller Frisby Technologies GmbH, a joint venture
with Schoeller  Textil AG to expand the European  distribution  of the Company's
products.  The Company believes that the initial equity and debt contribution to
this joint venture will not exceed $1 million.

     Based on the Company's  current  operating plan, the Company  believes that
the cash  available as a result of the  committed  portion of the Line of Credit
and other  equity  financing  activity  mentioned  above will be  sufficient  to
satisfy its operational  and capital  requirements  through  December 2000. Such
belief is based upon certain  assumptions,  and there can be no  assurance  that
such assumptions are correct.  In the event that the Company's plans change,  or
its available  cash,  cash flow from operations and available line of credit are
insufficient to fund operations due to unanticipated delays, problems,  expenses
or otherwise,  the Company would be required to seek additional financing sooner
than anticipated.  Further, depending on the Company's progress in marketing its
product line, gaining  acceptance of its thermal  management  technology and its
other products and services among the business  community or the  identification
of strategic acquisition or licensing  opportunities,  the Company may determine
that it is advisable to raise additional capital sooner than was anticipated.

INFLATION

     The  impact  of  general  inflation  on the  Company's  business  has  been
insignificant  to date and the  Company  believes  that it will  continue  to be
insignificant for the foreseeable future.

FOREIGN CURRENCY

     The functional  currency of the Schoeller Frisby  Technologies  GmbH is the
Swiss Franc.


FORWARD-LOOKING STATEMENTS
Certain  information   contained  in  this  Quarterly  Report  on  Form  10-QSB,
including,  without  limitation,  information  appearing  under  Part I, Item 2,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations," are  forward-looking  statements (within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities  Exchange Act of
1934).  Factors set forth in the Company's Prospectus filed April 1, 1998, or in
the Company's other Securities and Exchange Commission filings, could affect the
Company's  actual results and could cause the Company's actual results to differ
materially from those expressed in any forward-looking statements made by, or on
behalf of, the Company in this Quarterly Report on Form 10-QSB.

     Those statements are subject to numerous risks and uncertainties that could
cause actual  results,  performance and  achievements to differ  materially from
those  described  or implied in the  forward-looking  statements,  and  reported
results  should not be considered an  indication  of future  performance.  Those
potential risks and uncertainties  include without limitation the uncertainty of
the economic  environment  for the remainder of this year,  the need for further
development  of  certain  of Frisby  Technologies'  products  and  markets,  the
development of  alternative  technologies  or legal  challenges to the Company's
existing  technologies by third parties and the uncertainty of market acceptance
and demand for the company's products in the future.

PART II-OTHER INFORMATION

Item 1.  Legal Proceedings

     The Company is  presently  involved in a legal  dispute  pertaining  to its
exclusive  worldwide  license  rights  for  attaching  its foam to fabric  under
agreements  with one of its  licensors,  Outlast  Technologies.  Frisby filed an
arbitration  claim  on April  25,  2000,  in  accordance  with the  terms of the
Frisby-Outlast  license  agreement.  The Company  remains  fully  confident  its
position  will  prevail  and  expects no adverse  effect  from the  arbitration.
Attendant to this  arbitration  is a subsequent  patent  infringement  complaint
filed in U.S. Federal Court by Outlast that likewise the company believes has no
merit in fact and will not  materially  affect  the  Company's  near or mid term
performance.


Item 2.  Changes in Securities and Use of Proceeds

     On  May  31,  2000  the  Company   completed  a  private  placement  equity
transaction  with an  investor  group for $4  million of a  potential  aggregate
equity transaction in the Company of up to $7.5 million.  This transaction was a
unit (the "Unit")  consisting  of one share of Frisby common stock on the Nasdaq
SmallCap  Market and one five-year  warrant to buy a share of common stock at an
exercise price of $7.00 per share. The purchase price of this offering was $5.00
per Unit.


Item 3.  Defaults upon Senior Securities

     None.

Item 4.  Submission of Matters to a Vote of Security Holders

     None

Item 5.  Other Information

     See the Form 8-K,  dated April 25, 2000,  regarding  the  establishment  of
Schoeller Frisby Technologies GmbH.

     See the Form 8-K,  dated June 15, 2000,  regarding  the $4 million  private
placement equity transaction.

Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits 27.1     Financial Data Schedule

         (b)      Reports on Form 8-K

                  The  Company  filed a report  on Form 8-K on  April  25,  2000
                  regarding the  establishment of Schoeller Frisby  Technologies
                  GmbH.


                  The Company  filed a report on Form 8-K on September  15, 2000
                  regarding the $4 million private placement equity transaction.



<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

         Dated:  November 14, 2000

                                            FRISBY TECHNOLOGIES, INC.



                                         By:/s/ Gregory S. Frisby
                                            ---------------------
                                            Gregory S. Frisby
                                            Chief Executive Officer



                                         By:/s/ Duncan R. Russell
                                            ---------------------
                                            Duncan R. Russell
                                            President & Chief Operating Officer